Fesco profit falls in second quarter

Restructuring Russian owner weakened by higher financial costs.

Russian owner Fesco has posted lower earnings for the second quarter to 30 June.

The containership and bulker specialist said net profit was $8m, down from $80m in the same period of 2016.

Revenue was up at $174m from $132m, but finance costs knocked $17m off the bottom line, against a gain of $76m last year.

Last week, the owner arranged fresh finance with VTB Bank worth up to $680m.

The company said the cash will be used to repay or settle a significant portion of existing liabilities.

The credit line matures over five years to pay for the reorganisation of its 8% senior secured notes due 2018, the 8.75% notes due 2020 and other debt.

Fesco said last month that a majority of shareholders approved a restructuring of bonds totaling $655m in outstanding debt. They were initially sold for $875m.

The restructuring terms involved a one-time cash payment of $547.5m, conditional on Fesco raising new cash through share sales or debt finance.